Pleasants Power Station sale to Mon Power was nixed after the PSC attached conditions to the sale that “would result in Mon Power assuming exposure and significant commodity risk.” If a buyer for the coal-fired plant isn't found by the new year, the plant will be closed.

Pleasants Area Chamber of Commerce Executive Director Jody Murphy said he doesn’t expect the plant to close and pledged to do “everything needed” to assist FirstEnergy in plant operations or the attempted sale of the plant.

Critics argued against the sale of the Pleasants station to Mon Power, saying ratepayers would have assumed all of the plant’s costs and financial risks while guaranteeing FirstEnergy and its shareholders "a guaranteed revenue stream."

Mon Power, Potomac Edison back out of Pleasants Power deal

Pleasants Power Station sale to Mon Power was nixed after the PSC attached conditions to the sale that “would result in Mon Power assuming exposure and significant commodity risk.” If a buyer for the coal-fired plant isn't found by the new year, the plant will be closed.

Staff file photo

Pleasants Area Chamber of Commerce Executive Director Jody Murphy said he doesn’t expect the plant to close and pledged to do “everything needed” to assist FirstEnergy in plant operations or the attempted sale of the plant.

JIM ROSS / The State Journal

FirstEnergy said it could not accept the stringent conditions West Virginia Public Service Commission had demanded if the sale of the Pleasants plant to Mon Power and Potomac Edison moved forward.

Photo courtesy Public Service Commission of West Virginia

Critics argued against the sale of the Pleasants station to Mon Power, saying ratepayers would have assumed all of the plant’s costs and financial risks while guaranteeing FirstEnergy and its shareholders "a guaranteed revenue stream."

ST. MARYS — It could be mid-year before FirstEnergy is ready to say what will happen with Pleasants Power now that Monongahela Power Co. and Potomac Edison have decided not to buy the coal-fired plant.

Mon Power and Potomac Edison notified the Public Service Commission this week that they were pulling the plug on a deal to purchase Pleasants from Allegheny Energy Supply for $195 million. All three are FirstEnergy companies, but AES is based in Ohio, where competitive energy markets made the Pleasants plant a liability.

The notice, filed Monday, said Mon Power and Potomac “will not accept the conditions ... that would result in Mon Power assuming exposure and significant commodity risk, which is inconsistent with FirstEnergy’s announced corporate strategy.”

FirstEnergy spokesman Todd Meyers said about 200 people work at the Pleasants plant at Willow Island.

“Allegheny Energy Supply will continue to evaluate other options for its competitive Pleasants plant,” Meyers said. “We have not made any final decisions or announcements concerning the future of our competitive generation plants, including whether they will be sold or closed.”

The decision to terminate the purchase plan came after the Federal Energy Regulatory Commission rejected the sale Jan. 12. The West Virginia Public Service Commission agreed to the sale two weeks later, but attached conditions that FirstEnergy deemed unacceptable: PSC said it would agree to the transfer, but only if Mon Power and Potomac accepted conditions that would protect ratepayers from risks associated with the deal. That included requiring limitations on the costs to customers, limitations on the recovery of closing costs if the plant is retired early and protection against costs related to prior operations of the plant or problems with the McElroy’s Run Impoundment and Dam.

Meyers said FirstEnergy and its subsidiaries had “thoroughly reviewed both orders and evaluated our options” before deciding to pull the plug, pointing out the PSC’s proposed risk-sharing condition “would result in Mon Power assuming significant commodity risk, which is inconsistent with FirstEnergy’s announced corporate strategy.”

While the FERC order could have been appealed or a new request for proposals issued, Meyers said there were no guarantees the proposal would have fared better the second time around.

Both state and federal approval were needed to proceed, he added.

“The lights will stay on for our West Virginia customers,” Meyers said. “Mon Power will continue to operate its generation plants and purchase any additional capacity and energy it may need from the PJM market.

“While we are disappointed with this outcome, we are very appreciative of the hard work and dedicated efforts by our employees, community and business leaders and other stakeholders to try to bring the plan to fruition.”

FirstEnergy had insisted the deal would have helped its West Virginia subsidiaries avoid an energy shortfall in its service territory in Northern West Virginia and the Eastern Panhandle, predicting the average residential bill would drop about $1 a month.

Consumer watchdogs, however, pointed to Mon Power’s acquisition of another FirstEnergy property, the Harrison Power plant, in 2013, which they said had already cost ratepayers more than $160 million.

In a brief filed with FERC, the West Virginia Consumer Advocate Division had argued the deal was designed to allow FirstEnergy to “avoid a further write-off of its investment in an aging coal plant that is no longer economic in wholesale markets.”

Jody Murphy, executive director of the Pleasants Area Chamber of Commerce, said officials are “committed to keeping the plant open and its workers employed.”

While FirstEnergy could choose to continue operating Pleasants, sell the plant or close it altogether, Murphy said he doesn’t think it will close.

“While it is a coal-fired power plant, it is a Cadillac of coal-fired power plants. It is decades ahead of the curve in terms of EPA compliance. If (FirstEnergy) opts to sell the plant, I feel confident it can find a buyer that will continue to run the plant. Our concern, of course, is the closure of the plant and the loss of those jobs and taxes for the community,” Murphy said.

“We are taking the Boy Scout approach: Expect the best, but prepare for the worst. However, we do not believe the plant will be shuttered. And we will do (anything) and everything needed to assist FE in plant operations or the attempted sale of the plant.”

Emmett Pepper, executive director of Energy Efficient West Virginia, called FirstEnergy’s decision “a major win for the 530,000 Mon Power and Potomac Edison consumers in West Virginia.

“This deal was bad from the beginning, and the extensive evidence presented at the PSC proceeding made clear that the proposed transfer would benefit FirstEnergy and hurt West Virginians struggling to survive in today’s economy,” Pepper wrote in a release touting the decision.

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